Cardinal Health, Inc. · NYSE:CAH
Cardinal Health — Q4 FY2020 Earnings Presentation
23 slides from Cardinal Health's earnings presentation, Aug 6, 2020
Slide 1: Q4 FY20 Cardinal Health, Inc. Earnings Call
Q4 FY20 CARDINAL HEALTH, INC. EARNINGS CALL AUGUST 6, 2020
Slide 2: Forward-looking statements and GAAP reconciliation
Forward-looking statements and GAAP reconciliation Cautions Concerning Forward-Looking Statements This presentation contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. These statements may be ident
Slide 3: FY20 highlights
FY20 highlights ▪ Grew non-GAAP operating earnings and exceeded non-GAAP EPS guidance range Financial ▪ Received positive contributions from generics program Performance ▪ Surpassed enterprise cost savings target, with excellent savings contributions from Medical global manufacturing and supply chai
Slide 4: Q4 results
Q4 results 4
Slide 5: Q4 FY20 financial summary
Q4 FY20 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) Q4 FY20 Q4 FY20 Revenue $36,689 N/A % change (2)% Gross Margin $1,590 $1,583 % change (5)% (5)% SG&A $1,137 $1,141 % change (3)% (2)% Operating Earnings1 $270 $442 % change (12)% (13)% Interest & Other 2 $27 N/A % change (61)% Net Earning
Slide 6: Q4 FY20 Pharmaceutical segment results
Q4 FY20 Pharmaceutical segment results Q4 FY20 ($M) Q4 FY19 ($M) YoY change Revenue $33,241 $33,401 0% Segment profit $359 $447 -20% Segment profit margin 1.08% 1.34% -26 bps Drivers: Revenue = Expected reduced pharmaceutical demand as a result of accelerated Q3 sales related to COVID-19 Segment pro
Slide 7: Q4 FY20 Medical segment results
Q4 FY20 Medical segment results Q4 FY20 ($M) Q4 FY19 ($M) YoY change Revenue $3,453 $3,956 -13% Segment profit $120 $97 24% Segment profit margin 3.49% 2.45% 104 bps Drivers: Revenue - Adverse effect of COVID-19, primarily on products and distribution Segment profit + Cost savings initiatives + Bene
Slide 8: FY20 results
FY20 results 8
Slide 9: FY20 financial summary
FY20 financial summary GAAP Basis ($M) Non-GAAP Basis ($M) FY20 FY20 Revenue $152,922 N/A % change 5% Gross Margin $6,868 $6,916 % change 0% 1% SG&A $4,572 $4,532 % change 2% 1% Operating Earnings1 $(4,098) $2,384 % change N.M. 1% Interest & Other2 $237 N/A % change (23)% Net Earnings1,3 $(3,696) $1
Slide 10: FY20 Pharmaceutical segment results
FY20 Pharmaceutical segment results FY20 ($M) FY19 ($M) YoY change Revenue $137,495 $129,917 6% Segment profit $1,753 $1,834 -4% Segment profit margin 1.28% 1.41% -14 bps Drivers: Revenue + Pharmaceutical Distribution + Specialty Solutions Segment profit - Pharmaceutical Distribution customer contra
Slide 11: FY20 Medical segment results
FY20 Medical segment results FY20 ($M) FY19 ($M) YoY change Revenue $15,444 $15,633 -1% Segment profit $663 $576 15% Segment profit margin 4.30% 3.68% 61 bps Drivers: Revenue - Adverse effect of COVID-19, primarily on products and distribution + Cardinal Health at Home Segment profit + Cost savings
Slide 12: FY21 outlook
FY21 outlook 12
Slide 13: COVID-19 trajectory
COVID-19 trajectory Assumed recovery Significant impact Moderate impact Mild impact Q4 FY20 1H FY21 2H FY21 Key assumptions ▪ No additional widespread COVID-19 shutdowns ▪ Elective procedures and physician office visits expected to fully recover to pre-COVID-19 levels exiting FY21, with a more signi
Slide 14: FY21 financial expectations
FY21 financial expectations FY21 outlook FY20 actual Non-GAAP EPS $5.25 - $5.65 $5.45 Interest and other $190M - $215M $237M Non-GAAP ETR 24.0% - 26.0% 25.1% Diluted weighted average 292M - 296M 295M shares outstanding Capital expenditures $400M - $450M $375M The company does not provide forward-loo
Slide 15: FY21 Pharmaceutical segment outlook
FY21 Pharmaceutical segment outlook Revenue Profit Mid-single digit percentage growth Low-single digit percentage growth Key assumptions ▪ Consistent market dynamics within our generics program ▪ Similar contingent brand inflation rate, continued less dollar contribution each year ▪ Similar opioid-r
Slide 16: FY21 Medical segment outlook
FY21 Medical segment outlook Revenue Profit Low-single digit percentage growth High-single digit percentage decline Key assumptions ▪ Excluding effect from COVID-19, segment profit growth would be mid-single digits ▪ Continued benefits from global manufacturing and supply chain transformation ▪ Bene
Slide 17: FY21 strategic priorities
FY21 strategic priorities ▪ Optimize our global supply chain Optimize ▪ Drive commercial excellence core ▪ Maximize all aspects of our generics program businesses ▪ Enhance cost savings initiatives to exceed our 5-year, $500M goal ▪ Fuel growth in strategic areas: ▪ Specialty ▪ at Home Invest for ▪
Slide 18: Appendix
Appendix 18
Slide 19: GAAP / Non-GAAP Reconciliation (Fourth Quarter 2020)
Cardinal Health, Inc. and Subsidiaries GAAP / Non-GAAP Reconciliation1 Gross Operating Earnings Net Diluted Margin SG&A2 Earnings Before Provision for Earnings3 Effective EPS3 Gross Growth Growth Operating Growth Income Income Net Growth Tax Diluted Growth Margin Rate SG&A2 Rate Earnings Rate Taxes
Slide 20: GAAP / Non-GAAP Reconciliation (Fiscal Year 2020)
Cardinal Health, Inc. and Subsidiaries 1 GAAP / Non-GAAP Reconciliation Operating Earnings/ Net Gross Earnings/ (Loss) Provision for/ Earnings/ Diluted Margin SG&A2 Operating (Loss) Before (Benefit from) Net (Loss)3 Effective EPS3 Gross Growth Growth Earnings/ Growth Income Income Earnings/ Growth T
Slide 21: Segment Information
Cardinal Health, Inc. and Subsidiaries Segment Information Fourth Quarter (in millions) 2020 2019 (in millions) 2020 2019 Pharmaceutical Medical Revenue Revenue Amount $ 33,241 $ 33,401 Amount $ 3,453 $ 3,956 Grow th rate -% 6% Grow th rate (13)% 1% Segment profit Segment profit Amount $ 359 $ 447 A
Slide 22: Forward Looking non-GAAP Measures
Cardinal Health, Inc. and Subsidiaries Forward Looking non-GAAP Measures In this document, the Company presents certain forward-looking non-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP me
Slide 23: Definitions
Cardinal Health, Inc. and Subsidiaries Definitions Growth rate calculation: growth rates are determined by dividing the difference between current-period results and prior-period results by prior-period results. Interest and Other, net: other (income)/expense, net plus interest expense, net. Segment